Local communities should set up "neighbourhood watch" groups to support elderly people living alone or needing help with everyday tasks, according to the government's social care minister.

Norman Lamb risks criticism that he is calling on volunteers to step in to meet people's needs after deep government cuts in funding for councils that pay for care services.

But the minister will insist in a speech on Wednesday evening that he is not suggesting replacing "the safety net and essential care and support the NHS and local government provides, which is substantial and effective".

Rather, he will say, the rapid ageing of the population demands fresh thinking and action to meet growing care needs: "We have a grassroots movement to keep an eye on our neighbours' houses and property to guard against crime. So what about one to guard against isolation?"

The number of older people in England with care needs is forecast to rise by 60% over the next 20 years, but means-tested state funding will be guaranteed under government plans only for those whose needs are judged "substantial".

The number of people who received some form of council-funded care and support in their own homes dropped from 958,000 in 2009-10 to 802,000 in 2011-12.

Lamb, a Liberal Democrat, is due to float the idea of a neighbourhood watch scheme for the care of older and vulnerable people when he speaks at a Guardian debate on the challenges and opportunities presented by the ageing society.

The minister is expected to say: "I want to explore how we can reawaken communities' natural volunteer spirit to help provide an extra layer of support for older people. That means tapping into the energy of communities, bridging the gap between generations and encouraging everyone to help avoid leaving people lonely and isolated."

According to the Campaign to End Loneliness, one in 10 old people feels lonely "always" or "severely", and the effect of this on their health is equivalent to smoking 15 cigarettes a day.